Michigan Real Estate License Law for Brokers
Michigan real estate licensing is governed by the Occupational Code, Article 25 (MCL 339.2501-2518), administered by the Department of Licensing and Regulatory Affairs (LARA). This chapter covers the broker and associate-broker roles, compensation flow, and supervisory duties.
LARA and Article 25
LARA licenses and regulates real estate brokers, associate brokers, and salespersons under Article 25 of the Occupational Code. The employing (principal) broker holds the firm's authority and is legally responsible for its operations, advertising, trust funds, and the licensed activity of affiliated licensees. A trade association has no licensing authority.
Broker and Associate Broker
An associate broker has met broker qualifications and passed the broker exam but works under an employing broker rather than operating a firm. Salespersons and associate brokers conduct licensed activity for and in the name of the employing broker and may be paid only through that broker, not directly by a client or closing agent.
Supervision and Recordkeeping
The employing broker must supervise affiliated licensees, maintain any required trust/escrow account, and keep transaction records available to LARA. Failure to supervise, mishandling trust funds, and dishonest or misleading conduct are common grounds for discipline. This supervisory accountability is what distinguishes the broker tier from the salesperson tier.